CA Foundation Exam > CA Foundation Questions > Capital brought in by the proprietor is an ex...
Start Learning for Free
Capital brought in by the proprietor is an example of
- a)Increase in asset and increase in liability.
- b)Increase in liability and decrease in asset
- c)Increase in asset and decrease in liability.
- d)Increase in one asset and decrease in another asset.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Capital brought in by the proprietor is an example ofa)Increase in ass...
Increase in Asset and Increase in Liability
When a proprietor brings in capital, it is considered as an investment in the business. This investment increases the assets of the business while also creating a liability to the proprietor. The following points explain why capital brought in by the proprietor is an example of an increase in asset and an increase in liability:
Increase in Asset:
- The capital brought in by the proprietor is a cash injection into the business. This cash is considered an asset of the business as it can be used to purchase other assets such as equipment, inventory or property.
- The cash injection also increases the overall value of the business, which is reflected in the balance sheet as an increase in assets.
Increase in Liability:
- The capital brought in by the proprietor creates a liability to the business as well. The business now owes the proprietor the amount of capital invested.
- This liability is recorded in the balance sheet as an increase in liabilities.
Overall, the capital brought in by the proprietor is an example of an increase in asset and an increase in liability since it increases the value of the business while also creating a debt to the proprietor.
When a proprietor brings in capital, it is considered as an investment in the business. This investment increases the assets of the business while also creating a liability to the proprietor. The following points explain why capital brought in by the proprietor is an example of an increase in asset and an increase in liability:
Increase in Asset:
- The capital brought in by the proprietor is a cash injection into the business. This cash is considered an asset of the business as it can be used to purchase other assets such as equipment, inventory or property.
- The cash injection also increases the overall value of the business, which is reflected in the balance sheet as an increase in assets.
Increase in Liability:
- The capital brought in by the proprietor creates a liability to the business as well. The business now owes the proprietor the amount of capital invested.
- This liability is recorded in the balance sheet as an increase in liabilities.
Overall, the capital brought in by the proprietor is an example of an increase in asset and an increase in liability since it increases the value of the business while also creating a debt to the proprietor.
Free Test
FREE
| Start Free Test |
Community Answer
Capital brought in by the proprietor is an example ofa)Increase in ass...
The Correct Answer is "A" because :
1. When a proprietor (Owner of the Business) brings Capital (money) into the Business. It increases the asset (From Business point of view)..
2. But at the same time, now the Business has a liability i.e Business have to re-pay the amount to the proprietor which he brought in the beginning as Capital.
3. In short, you might have heard that "A Company is separate entity from its members, owner etc." because of which we (company) considers the "bringing of capital by the proprietor as an increase in asset and increase in liability"
1. When a proprietor (Owner of the Business) brings Capital (money) into the Business. It increases the asset (From Business point of view)..
2. But at the same time, now the Business has a liability i.e Business have to re-pay the amount to the proprietor which he brought in the beginning as Capital.
3. In short, you might have heard that "A Company is separate entity from its members, owner etc." because of which we (company) considers the "bringing of capital by the proprietor as an increase in asset and increase in liability"
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer?
Question Description
Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer?.
Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Capital brought in by the proprietor is an example ofa)Increase in asset and increase in liability.b)Increase in liability and decrease in assetc)Increase in asset and decrease in liability.d)Increase in one asset and decrease in another asset.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup